Cannot create proper tax rates for guest user purchases in Greece

[ioweb-gr]

Summary

In our country (Greece) we have some tax rates which apply conditionally based on whether the customer is a business or an individual and their physical location.

When the user is logged in, it's possible to handle this by changing his group and assigning a tax class to that group.

However when the user is not logged in, there's no possibility to apply different tax rates as the tax rules are based on tax classes assignable only to groups.

What's the proper way to address this situation in shops which are both B2C and B2B / Wholesale and they sell to random businesses as well without them necessarily having an account?

Examples

Basically I need to cover these scenarios .

Status	Is Business	Is from specific area	Rate
Logged in	No	No	24
Logged in	No	Yes	24
Logged in	Yes	No	24
Logged in	Yes	Yes	17
Guest	No	No	24
Guest	No	Yes	24
Guest	Yes	No	24
Guest	Yes	Yes	17

This is just an example of a common use case as there are cases where they might be fully exempt from VAT tax obligations

Proposed solution

Here the ERP systems take into account the existence of a valid VAT ID to differentiate and apply the correct tax rules, maybe something like this is possible in Magento as well?

Release note

No response

Triage and priority

• Severity: S0 - Affects critical data or functionality and leaves users without workaround.
• Severity: S1 - Affects critical data or functionality and forces users to employ a workaround.
• Severity: S2 - Affects non-critical data or functionality and forces users to employ a workaround.
• Severity: S3 - Affects non-critical data or functionality and does not force users to employ a workaround.
• Severity: S4 - Affects aesthetics, professional look and feel, “quality” or “usability”.

[m2-assistant]

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[hostep]

Have you seen the following configuration option in the backend? You can enable it and more config options will be revealed that will allow you to configure Magento to put (guest) customers in specific groups depending on their country:

Customer > Customer Configuration > Create New Account Options > Enable Automatic Assignment to Customer Group

I can recommend the following settings:

- Customer Configuration => Create New Account Options => Enable Automatic Assignment to Customer Group => Yes
- Customer Configuration => Create New Account Options => Tax Calculation Based On => Billing Address
- Customer Configuration => Create New Account Options => Default group => {your customer group for B2C tax}
- Customer Configuration => Create New Account Options => Group for Valid VAT ID - Domestic => {your customer group for domestic B2B tax}
- Customer Configuration => Create New Account Options => Group for Valid VAT ID - Intra-Union => Companies - {your customer group for intra-union B2B tax}
- Customer Configuration => Create New Account Options => Group for Invalid VAT ID => {your customer group for B2C tax}
- Customer Configuration => Create New Account Options => Validation Error Group => {your customer group for B2C tax}
- Customer Configuration => Create New Account Options => Validate on Each Transaction => Yes
- Customer Configuration => Create New Account Options => Default Value for Disable Automatic Group Changes Based on VAT ID => No
- Tax => Tax Classes => Default Tax Class for Customer => {your customer group for B2C tax}
- Tax => Calculation Settings => Tax Calculation Based On => Shipping Address

Hopefully this info can help you further.

Be sure to test it out on a dev/staging environment before applying it on a production environment.

[ioweb-gr]

@hostep we didn't go with the enable automatic assignment to customer group option because of one simple reason.

Although in some cases it can help, in cases when we're using groups for Catalog Price Rules it requires a multiplication of the discount groups * tax classes and then the automatic assignment has to only pick one group for each case.

In prestashop for example this is not a problem because you can assign multiple customer groups to a customer so you can serve both the tax system and the wholesale discounts.

Moreover for guests we face this situation

3 example types of domestic businesses

• Normal Regime Tax Class with 24% vat tax
• Special Regime Tax Class with 17% vat tax
• Exempt Regime Tax Class with 0% vat tax (for example businesses with < 10000EUR annual income)

These are all domestic businesses located in Greece

Furthermore for the above cases there might be difference depending on where we're shipping

Special Regime

• Shipping to their billing address is 17% vat tax (for example they're located in a remote island of Greece)
• Shipping to an address of a branch office not in the island is 24% vat tax as in the Normal Regime

Exempt Regime

• Always 0% tax

Normal Regime

• 24% always whether they ship to mainland or to a remote island with a special regime so it's based on their billing address.

I honestly don't see a path with the current rules to apply those tax models any hint is welcome :)

[hostep]

Maybe you can setup different tax rates depending on postcode or region?

[ioweb-gr]

I thought about this too but I get a conflict when dealing with guests because there's no way to differentiate the rate for guest customers with a VAT ID and without a VAT ID.

For example

• I set up a tax rate of 17% for zip 81*
• and a tax rate for anything up to 80999 and above 82000 with 24%

The guest customer without a VAT ID will receive 17% or the opposite depending on the tax class I choose for guest customer

[ioweb-gr]

I'm thinking a potential workaround would be if the system emits some event for modifying the guest customers tax class dynamically. In that case we could write custom logic to handle the "switching" but I don't see anything in the framework to support this.

[m2-assistant]

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[engcom-Hotel]

Hello @ioweb-gr,

Thanks for the report and collaboration!

After going through the issue it appears to be valid. In Magento's current tax rule mechanism:

• Tax rules are applied based on tax classes, which are tied to customer groups.
• Guest users are not assigned to any customer group, making it impossible to apply specific tax rates for guests based on whether they are businesses or individuals and their location.
• This creates a limitation for stores operating in countries like Greece, where tax rates depend on such conditions.

But this issue appears to be more of a feature request rather than a Magento bug. Here's why:

• The issue involves handling tax rates for guest users based on whether they are businesses or individuals and their location.
• Magento's current functionality is designed to apply tax rules based on customer groups and tax classes, which works well for logged-in users but has limitations for guest users.

Hence marking it as a feature request.

Thanks